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Facebook's ad service for mobile apps opens to developers

The world's largest social network is expanding its advertising technology to other app makers, hoping to grab an even larger piece of the ad pie.

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Facebook's new ad technology works with outside app developers. Facebook / Shazam

The next time you see an advertisement in Shazam, it might be coming from Facebook.

The social networking company has expanded its advertising technology to allow app makers to insert ads from its network into their programs. The goal, the company says, is to help app developers by connecting their products to its advertising technology.

This effort, called Audience Network, allows advertisers to use anonymized information from Facebook, such as a person's age, location and what books they like, and send tailored ads when they're using apps on their phone.

The move helps Facebook respond to the quickly changing world of mobile devices where apps, not websites, are king. "Most people are spending most of their time inside apps," said Sriram Krishnan, a manager of Facebook's Audience Network.

The effort, first announced in April, is part of Facebook's large and growing efforts to expand its influence in the online advertising industry. Last week, the company announced Atlas, a new technology that allows advertisers to send ads to customers, regardless of whether they are on Facebook's website, its mobile apps or using programs made by other companies.

In building Audience Network, Facebook is positioning itself to compete more directly with Google, whose AdMob rules the roost of mobile advertising today. Google took about half of the mobile ad industry's $17.7 billion in spending last year, according to industry watcher eMarketer.

Facebook is currently second fiddle, ringing up nearly 18 percent of mobile ad revenue last year and an estimated 22 percent this year. Twitter is a distant third, pulling in 2.4 percent.

But the industry is growing rapidly. Mobile ad revenue more than doubled last year from 2012, and is expected to grow another 84 percent this year. That's much faster than growth of advertising over the Web as a whole.

For Facebook, which didn't have much of an advertising effort for mobile devices a couple years ago, the rapidly expanding market represents an even more important opportunity to bolster revenue and profit.

What isn't certain is whether Facebook's efforts can draw more attention away from AdMob and other ad technologies offered by competitors. Twitter and Apple both offer ad technology to competitors, for example, and a growing list of startups promise to make it easier to tap all the large networks of ad makers without adding too much complex code to an app.

Still, Facebook thinks it will be different. One way is the type of ads it offers for apps. Unlike the typical banner ad at the edge of a screen, or a popup obstruction in the app, Facebook said its ads are made to look like natural parts of an app. The result is that on a news app, for example, the ad might be inserted in the stream of information, making it less jarring to look at.

This is a growing trend within the industry, but it's also one large companies like Facebook believe will distance them from competitors. And like many other companies, Facebook makes money by splitting the revenue generated through ads with the app maker, though it declined to discuss details of those agreements.

Facebook said it has already begun work with companies such as music app Shazam, game companies like Glu and Zynga, and dictionary maker Miriam Webster to integrate Audience Network into their offerings.

Its efforts are already showing results, too; Shazam and Glu saw increases in ad-related revenue. It's working well for advertisers too: Walgreens saw four to five times as many people clicking on its ads, Facebook said.